Prop. A Stands but Prop. C May Fall to Court Ruling

Los Angeles County’s decade-old Proposition A sales-tax surcharge--the $400-million-a-year engine driving the county’s 30-year transportation program--apparently is unaffected by Thursday’s state Supreme Court ruling overturning a similar San Diego County surcharge.

But the fate of Proposition C, a second half-cent surcharge that was authorized by a narrow majority of voters in 1990, is less certain, lawyers familiar with the case said.

Also in doubt are surcharges in neighboring counties that are planned in part to pay for a regional commuter-rail network. The first three legs of that network are scheduled to start carrying commuters to Los Angeles from Moorpark, San Bernardino and Santa Clarita next fall.

Lawyers agreed that the fate of these special transit taxes will take years to sort out because the Supreme Court wants to judge each on its merits and motivations--chiefly to see if it was created to circumvent the tax limit rules set by Proposition 13 in 1978.

“They didn’t make a blanket prohibition against districts formed after Proposition 13,” said Al Kaufer of Nossaman, Guthner, Knox & Elliott, the law firm representing the Los Angeles County Transportation Commission against a Proposition C challenge filed by the Libertarian Party.

“What they said was that they are legal as long as they were not created to replace lost property tax revenue. But we won’t know (how they determine that) until they are tested on a case-by-case basis.”

Opponents of such special taxes, however, said the limits implied by Thursday’s ruling--in a case involving a surcharge imposed by a special district created by San Diego county to build jails and courtrooms--”gives us another bullet for our gun.”

“It helps our case,” said Santa Ana lawyer Mark Rosen, who is representing Libertarians in their challenge. “If LACTC falls within the definition of the Rider case decided today, Prop. C is dead.”

Apparently safe is Proposition A, which was challenged before the Supreme Court soon after voters approved it in 1980. In that case, the court said the tax was legal because it was not created to sidestep the property tax limits set by Proposition 13 two years earlier.

Rosen is challenging Proposition C based on another initiative, Proposition 62, aimed at closing the loopholes created by the Supreme Court ruling. A Los Angeles Superior Court turned down the challenge, which is now awaiting a hearing before the state Court of Appeal.

Money collected under Proposition C is being held in reserve by the LACTC until the court case is decided. However, the commission has been spending interest earned on the tax funds.

That interest, along with Proposition A revenue, pays for local and regional bus service, road and freeway improvements and construction of a 300-mile regional rail transit network.